Today's Call 

Buy shares of Sangam India Ltd (Rs. 406.25) around the current market price for a target of Rs. 442/511. Stop loss: Rs. 391.

Overview:  Sangam India Ltd is a leading textile manufacturer and exporter, particularly known for being Asia’s largest producer of PV dyed yarn at a single location. The company also specializes in ready-to-stitch fabrics.

Sangam India is well-positioned to benefit from the "China Plus One" strategy, where companies are diversifying their supply chains beyond China. 

Sector Outlook:  The textile sector, which has been sluggish for a while, is showing signs of revival. With the recent drop in cotton prices, the industry is expected to see a strong rebound in the second half of 2024.

Key Insights:  The company's increased production capacities are set to be fully operational by 2nd half of FY25. This should help in lowering costs through better optimization.

Future Projections:  Sangam India, a producer of cotton, PV-dyed yarn, and ready-to-stitch fabrics, aims to achieve a revenue of around Rs. 4,000 crore by FY25, following a significant expansion at its seven production units in Bhilwara, Rajasthan.

Moreover, it is aiming to strategically leverage the D2C (director) market and the digitised textile space to further elevate its reach and supply in India and overseas.

Financials: The Net Sales of the company came at Rs.696.68 crore in June 2024 up 2.89% from Rs.677.13 crore in June 2023.

Quarterly Net Profit came at Rs. 12.75 crore in June 2024 down 10.15% from Rs.14.19 crore in June 2023.

The EBITDA stood at Rs.67.85 crore in June 2024 up 22.27% from Rs. 55.49 crore in June 2023.

The EPS of Sangam India Ltd has marginally increased to Rs.2.87 in June 2024 from Rs.2.86 in June 2023. 

About the Company:  Sangam India Ltd is involved in producing and selling synthetic blended, cotton, and texturized yarn, as well as denim fabrics, and ready-made seamless garments. The company operates under various brands like Sangam Yarns, Sangam Suitings (its flagship brand), Sangam Denims, and C9 Airwear.

Its clientele includes notable names such as Banswara Syntex, Siyaram, RSWM Limited, Arvind, Trident, Marks & Spencer, Reliance Trends, Zivame, Myntra, Lifestyle International, Benetton, and Westside, among others.